Confused about status of mortgage

[pandacb]

We filed Chapter 7 and had our 341 yesterday. The Trustee seemed to get excited about taking our car and did not mention our house.

Our home is worth 25% less than what we owe on it and it has flooding issues. We are delinquent on our loan because we have been in the loan modification process for 10 months without getting a final agreement. Each month we make trial payments we get further behind because trial payments are considered partial payments under the orginal terms.

We really thought the Trustee would mention our mortgage, especially since he has to approve our modification if it comes through.

We marked our schedule with the intent to reaffirm - if the modification comes through.

What do you think will happen next?

[jlmaca]

We filed Chapter 7 and had our 341 yesterday. The Trustee seemed to get excited about taking our car and did not mention our house.

Our home is worth 25% less than what we owe on it and it has flooding issues. We are delinquent on our loan because we have been in the loan modification process for 10 months without getting a final agreement. Each month we make trial payments we get further behind because trial payments are considered partial payments under the orginal terms.

We really thought the Trustee would mention our mortgage, especially since he has to approve our modification if it comes through.

We marked our schedule with the intent to reaffirm - if the modification comes through.

What do you think will happen next?

Seems like a good time to get rid of a house that you can't afford and don't want or need. Why stay attached to a house that floods? And you are 25% in the hole....

[pandacb]

just this morning the lender's "financial counselor" told us we would be responsible for thousands in foreclosure fees and the deficiency of sale. I firmly believe this woman is wrong but there is alot that I don't know. That's why I thought it would be mentioned in the 341.

[jlmaca]

just this morning the lender's "financial counselor" told us we would be responsible for thousands in foreclosure fees and the deficiency of sale. I firmly believe this woman is wrong but there is alot that I don't know. That's why I thought it would be mentioned in the 341.

Your attorney should be able to answer these questions for you. Some attorneys are not very helpful however. It does not sound like your bk is discharged yet. If you are so inclined to get out from under the burden of the home you can always change your mind and not reafirm the mortgage and they cannot come after you for the deficiency since the whole thing would be discharged.

[helpmeout]

just this morning the lender's "financial counselor" told us we would be responsible for thousands in foreclosure fees and the deficiency of sale. I firmly believe this woman is wrong but there is alot that I don't know. That's why I thought it would be mentioned in the 341.

I wouldn't listen to the bank. As long as you don't sign a reaffirmation, the mortgage will be discharged along with the other debt. What this means is that the bank can't come after you for the foreclosure fees or any deficiency of a sale.

[freeatlast98]

We filed Chapter 7 and had our 341 yesterday. The Trustee seemed to get excited about taking our car and did not mention our house.

Our home is worth 25% less than what we owe on it and it has flooding issues. We are delinquent on our loan because we have been in the loan modification process for 10 months without getting a final agreement. Each month we make trial payments we get further behind because trial payments are considered partial payments under the orginal terms.

We really thought the Trustee would mention our mortgage, especially since he has to approve our modification if it comes through.

We marked our schedule with the intent to reaffirm - if the modification comes through.

What do you think will happen next?

Just a little confused because I'm possibly "if the bank agrees" going to enter a modification program. I thought after you made the three trial payments, the lender is supposed to make the modification permanent. Is that not true? I haven't filed chapter 7 yet however, I will I'm hoping after the modification goes through.

[pandacb]

We have been in the modification process ten months and counting. The bank will drag the permanent modification out as long as wants to, there are no guarentees. Banks are offerring the modifications on a voluntary basis - there is no law or rule that says they have to. They can and do cancel modifications whether you qualify or not.

[freeatlast98]

How was the modification period looked at through your bankruptcy filing? Did you enter into the modification before or after filing? I guess what I'm asking is, is it better to file before, during or after a trial modification? I'm really confused because if a modification does go through, then disposable income is more. Do you think it's still a Chapter 7? If your late on your mortgage while you're going through a Chapter 7, will it be affected?
I'm sorry to ask however, i'm very confused.

[pandacb]

Some of your questions I can help with, others...not so much.

Here is what the government guidelines say about "Making Homes Affordable" also known as "HAMP":

Frequently Asked Questions – Servicing Guide Announcement 09-05R: Home Affordable Modification

As of August 10, 2009

Q13.
If the borrower files for bankruptcy protection during the Trial Period, is the Trial Period Plan canceled automatically or is a servicer required to continue to work with the borrower?
Borrowers who file bankruptcy during the trial period, but who make all of the required payments in a timely fashion and are otherwise in compliance with the Trial Period Plan remain eligible for a modification provided all of the representations in section 1 of the trial plan remain true. The servicer and its bankruptcy counsel must work with the borrower and the borrower's bankruptcy counsel to obtain any required court approvals of the modification. A borrower actively involved in a bankruptcy proceeding prior to being placed in the HAMP is eligible for the HAMP at the Servicer’s discretion. If a servicer provides an offer under the HAMP to a borrower that is involved in an active bankruptcy case, the servicer must work with the borrower or borrower’s counsel to obtain all necessary approvals from the bankruptcy court.
----------------------

Yes, we filed Chapter 7.

We are late on our mortgage...everybody is if making trial payments because the trial payments are only partial payments on your original mortgage.

Disposable income is not a real issue for HAMP but it is for FHA loans and inhouse modifications. HAMP is concerned whether or not your mortgage (PITI) payment exceeds 31% of your gross income.

I don't know how the modification was looked at through the filing...it was not mentioned by the Trustee but I do know if it is finalized it has to have his approval.

Clear as mud? It is all very confusing.

[freeatlast98]

thank you for the clarification

Thank you so much for taking the time to clarify this for me. From I am getting, if I file after I start the trial period, the servicer should not hold it against me and will allow me to stay on the trial period. I think I feel better about this now, thanks to you, because I was afraid if the lender knew i was in bankruptcy, they'll would stop the trial. I'm keeping my fingers crossed that BofA will offer me a modification. I realize this will be the only way I can keep my home. Thank you again!! What state are you in? I'm in California..

[pandacb]

We are in Oregon. There is so much going on in California around these modifications...including a recent class action suit. I encourage you to visit loansafe.com, especially if your servicer is Bank of America. The thing to be most aware of, I think, is that lender participation in modification programs is voluntary. They agreed to cooperate with the modifications when they got bail-out money but there is no law or rule saying they have to. Their definition of cooperation is not what yours or mine would be. Perserverance and tenacity get you through the process. And, if your experience is like ours, they will threaten to cancel your trial (we had completed ours) due to the bankruptcy. But that seems to be just power-tripping, not borne out by actual practice.

Good luck.

[pandacb]

free...I made an error...it is loansafe.org

[freeatlast98]

Thank You again for all the information. I've had http://www.freehampreport.com prepare my documents for the modification. I paid them a small fee to help me. They requested all my financial info.including bank statements etc. They worked with me to come up with a pretty solid case for modification and made all the calculations for the bank. I'm just hoping BofA will consider it. I'm also thinking I should wait to file until after I receive a trial period for BofA, that's if they give me one. As of tomorrow, I'll officially be over 30 days late on my mortgage. According to conversations with BofA, they would not even consider a mod if I was still current.
You mentioned your lender said they might cancel the modification because of the bankruptcy. What have they done to follow through with that? I thought they couldn't do that. It seems stupid on their part to interfere with that
and make it harder if not impossible to pay your mortgage.
What do they want another house on their books??
Do you have a link or info. or what the class action suit states? Is the suit against BofA?

By the way thank you for the other link. I checked it out and it seems to have a lot of useful info.

[justbroke]

I've had http://www.freehampreport.com prepare my documents for the modification. I paid them a small fee to help me.

That's just so contradictory. I hope it works out for you. Please do not end up with what most other HAMP candidates have done... nothing. These mortgage companies have been taking trial payments forever and very few (less than 10%) of mortgages get modified under HAMP. I truly hope that this is changing.

If your home is 25% underwater, you should really be thinking financially about what you are doing. I understand that you want to "reaffirm", but I really hope that you are not reaffirming the debt. You are not required to reaffirm just to get the modification. The terms of the modification should clearly point this out -- as mine did.

Also, a correction to what your bank told you. If you don't reaffirm and allow the loan to be discharged, you will have no responsibility for any deficiency from this mortgage. This is why you really should not reaffirm the mortgage.

You need to be prepared to give it up and walk away. That can be emotional, but you need to separate emotion from sound business reasoning. I hope that you make the right decision.

[jlmaca]

That's just so contradictory. I hope it works out for you. Please do not end up with what most other HAMP candidates have done... nothing. These mortgage companies have been taking trial payments forever and very few (less than 10%) of mortgages get modified under HAMP. I truly hope that this is changing.

If your home is 25% underwater, you should really be thinking financially about what you are doing. I understand that you want to "reaffirm", but I really hope that you are not reaffirming the debt. You are not required to reaffirm just to get the modification. The terms of the modification should clearly point this out -- as mine did.

Also, a correction to what your bank told you. If you don't reaffirm and allow the loan to be discharged, you will have no responsibility for any deficiency from this mortgage. This is why you really should not reaffirm the mortgage.

You need to be prepared to give it up and walk away. That can be emotional, but you need to separate emotion from sound business reasoning. I hope that you make the right decision.

Great advice, could not agree more. It took me 3 years to divorce myself from a home that is 100k underwater. Could not be happier.